Lending policy

1. Membership with Sacco
   i. To obtain a loan with the Sacco, one has to be a fully registered member of
   the Sacco.
   ii. He/she has to be active in Sacco business i.e. Have an up to date mandatory,
   voluntary savings and share accounts.
   iii. Any member of the Sacco can apply for a loan given they meet the minimum
   requirements.

2. Principal Amount Borrowed
   i. There are two categories of loans disbursed. Each category has a specified
   loan period. Below is the break down;
    Ushs 1 – 4,999,999 = 6 months’ repayment period
    Ushs 5000,000 > above = 1 Year repayment period
   i. A loan applicant has to have saved at least 30% of the loan amount he/she
   applies for and at least have purchased 40 shares. (1 share @ ushs 10,000)
   ii. A grace Period of one month is given to the borrower before commencement
   of repayments.
   iii. Repayments thereafter are initiated automatically by the loans’ electronic
   system on a straight line basis covering the duration of the loan and invoices
   sent through SMSs and email to the respective borrower.

3. Interest Rate
   i. An interest is charged on all loans disbursed, different loan interest
   categories have different interest rates attached to them.
   Below is a table showing loan interest categories and their interest rates;

Loan Interest category – Ushs 1 – 1,000,000: 4%

Loan Interest category – Ushs 1,000,001- 4,999,999: 3%

Loan Interest category – Ushs 5,000,000 >above : 2%

ii. An interest fine at the same rate of the loan interest category accrues at the same fixed monthly rate for outstanding balances after the loan period expires.

4. Guarantors
   For any loan application, the applicant has to have at least two guarantors who are
   also members of the Sacco. These guarantors take on any loan amount outstanding
   in case of loan defaultment and failure to recover the full loan payable by the
   original loan holder.

5. Loan Approval

I. After a loan applicant has successfully completed the loan application form,
either in hard copy or electronically, a loans’ credit committee has to sit to
approve the loan.
II. After approval by the committee and upon receipt of the loan, the borrower
fills in an acknowledgement form stipulating receipt of funds and a loan
processing fee of Ushs 15,000 is charged.